Economy is poised to recover, says FM Nirmala Sitharaman

Amid majority of businesses under COVID-19 lockdown and people remaining in shelter-at-home mode, Finance Minister Nirmala Sitharaman Thursday took to twitter saying Economy is poised to recover.

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Her optimism stemmed from the fact that public sector banks have sanctioned loans worth Rs 5.66 lakh crore to MSMEs retail, agriculture and corporate sectors. These loans are waiting for disbursal soon after the lockdown.

“During March-April 2020, PSBs sanctioned loans worth Rs 5.66 lakh cr for more than 41.81 lakh accounts. These borrowers are from MSME, Retail, Agriculture & Corporate sectors, waiting for disbursal soon after #lockdown lifts. Economy poised to recover!,” the finance minister said in a series of tweets.

The minister, who is under attack for delaying a second tranche of fiscal stimulus, said the Reserve Bank of India’s effective communication and proactive actions had ensured that over 3.2 crore accounts availed the three-month moratorium.

"Quick query redressals allayed customer concerns. Ensuring responsible banking amid lockdown," she said.

For NBFCs and Housing Finance Companies, PSBs sanctioned Rs 77,383 crore between March 1 and May 4. Inclusive of targeted long term repo operations funds, there has been extended total financing of Rs 1.08 lakh crore which has ensured business stability and continuity, she said.

Finance Minister’s remarks came in the midst of gloomy prognoses about India’s economy, with many an economist fearing extended lockdown could end the financial year 2020-21 with a 1% contraction in GDP.

On Wednesday, The Nikkei/IHS Markit Services Purchasing Managers’ Index, a private survey showed the country’s services sector, which contributes more than half to the GDP, suffered the worst contraction, dipping to 5.4 points in April as coronavirus halted economic activities.

A day earlier, the same survey reported a contraction in the country’s manufacturing activities.